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CBS Corporation Stock Buy Recommendation Reiterated (CBS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- CBS Corporation (NYSE: CBS) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, notable return on equity, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 44.14% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CBS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CBS CORP has improved earnings per share by 17.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CBS CORP increased its bottom line by earning $2.41 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.41).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, CBS CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 385.50% to $335.00 million when compared to the same quarter last year. In addition, CBS CORP has also vastly surpassed the industry average cash flow growth rate of -13.54%.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.

CBS Corporation, together with its subsidiaries, operates as a mass media company in the United States and internationally. CBS has a market cap of $27.38 billion and is part of the services sector and media industry. The company has a P/E ratio of 18.8, above the S&P 500 P/E ratio of 17.7. Shares are up 22.7% year to date as of the close of trading on Thursday.

You can view the full CBS Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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